Improving the effectiveness of climate finance: key lessons / Miriam Chaum, Chris Faris, and Gernot Wagner, et al. Brookings Institution ; Climate Policy Initiative ; Environmental Defense Fund ; ODI, November 2011, 20 p.
EXECUTIVE SUMMARY (copyright © Brookings)Flows of finance to developing countries to support climate mitigation and adaptation efforts are growing in speed and scale, toward the target formalized in the Cancún Agreements to increase flows from developed to developing countries to $100 billion a year by 2020. Ensuring that this money is well spent, and hence maximizing its impact and effectiveness, will of course be critical for achieving outcomes and maintaining support. However, the tools and methods that are now being used to estimate, measure, monitor and disseminate the impact of public climate finance will not be sufficient to support this expansion. With many international institutions and bilateral agencies boosting their climate portfolios, as well as the creation of the Green Climate Fund, the time is ripe to examine current practices to improve the effectiveness of climate finance.
This paper presents an overview of existing practices by summarizing the findings from an extensive survey of various institutions, drawing on the lessons learned from development finance, the public and private activities of international financial institutions and experience with market-based instruments. The paper mainly focuses on mitigation, and it seeks to discern lessons for policymakers by addressing two key questions: What makes climate finance effective? and what tools, methods or systems might improve the effectiveness of climate finance?… (more)